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International Monetary Fund (IMF) chief, Dominique Strauss-Kahn
was arrested and charged on Sunday with sexually assaulting a New York hotel
maid, in a scandal that appeared to wreck his hopes of running for president of
France.

The charges threatened to create a leadership vacuum at the IMF,
overseer of the global economic system, and threw wide open the French
presidential election next April, for which opinion polls had made Strauss-Kahn
the front-runner.

One of his lawyers, Benjamin Brafman, told Reuters that his
client “will plead not guilty.” The 62-year-old Socialist, a key player in the
response to the 2007-9 global financial meltdown and in Europe’s debt crisis,
was taken off an Air France plane about to leave for Paris from John F Kennedy
International Airport on Saturday.

New York police spokesman Paul Browne said he was charged with a
criminal sexual act, unlawful imprisonment and attempted rape. He is expected
to go before a state court later on Sunday.

The arrest caused shock and disbelief in France, where a
government spokesman called for caution and respect for the presumption of
innocence.

“The news we received from New York last night struck like a
thunderbolt,” said Socialist leader Martine Aubry, appealing for party unity.

Francois Bayrou, a centrist opponent of Strauss-Kahn, said: “All
this is completely astounding, immensely troubling and distressing. If the
facts prove true … it’s something degrading for all women. It’s terrible for
the image of France.”

Far-right leader Marine Le Pen said her rival’s presidential
hopes had been crushed. Strauss-Kahn and Le Pen have led recent opinion polls
ahead of conservative President Nicolas Sarkozy, even though the chief of the
IMF had yet to declare his candidacy.

In a statement on its website, the fund declined to comment on
the case, saying only that it “remains fully functioning and operational.” But
a Greek official told Reuters the arrest could cause some delays to a European
Union/IMF bailout for Athens, in which Strauss-Kahn was closely involved.

Maid’s account

“We must wait until things settle and see if it’s true or a
provocation, one of Strauss-Kahn’s French-based lawyers, Leon Lef Forster,
said. “We must be especially careful not to get into a media circus and we must
wait until things are clear.”

A 32-year-old maid filed a sexual assault complaint after
fleeing the $3,000-a-night hotel suite at the Sofitel in Times Square where the
alleged incident occurred around 1 pm on Saturday, Browne said.

Strauss-Kahn appeared to have fled the hotel after the incident,
the police spokesman said.

Browne told Reuters: “She told detectives he came out of the
bathroom naked, ran down a hallway to the foyer where she was, pulled her into
a bedroom and began to sexually assault her, according to her account.

“She pulled away from him and he dragged her down a hallway into
the bathroom where he engaged in a criminal sexual act, according to her
account to detectives. He tried to lock her into the hotel room.” Strauss-Kahn
does not have diplomatic immunity, Browne said.

According to New York state law, a criminal sexual act carries a
potential sentence of 15-20 years, the same as attempted rape. Unlawful
imprisonment carries a potential sentence of three to five years.

The allegation is a major embarrassment to the IMF, which has
authorized billions of dollars of lending to troubled countries and played a
major role in the euro zone debt crisis.

France in shock

Popularly known by his initials DSK, the IMF managing director
had been expected to declare by late June if he would run for president of
France. The latest opinion polls ranked him as a clear winner over conservative
incumbent Sarkozy.

“The case and the charges … mark the end of his campaign and
pre-campaign for the presidency and will most likely prompt the IMF to ask him
to leave his post,” National Front leader Le Pen told i-Tele television.

Conservative Trade Minister Pierre Lellouche said: “I think we
have to grant DSK the presumption of innocence. If all this were true it would
be damning.” Even Strauss-Kahn’s political allies were pessimistic.

“The most likely outcome is that this case will stick and even
if he pleads not guilty, which he may be, he won’t be able to be candidate for
the Socialist primary for the presidency and he won’t be able to stay at the
IMF,” said prominent Socialist Jacques Attali.

Strauss-Kahn took over the IMF in November 2007 for a five-year
term scheduled to end next year. Before that, he was a French finance minister,
member of the French National Assembly and a professor of economics.

REUTERS